Blockchain could boost global trade by $1 trillion

Blockchain 2018 UN

(UN Blockchain, 2018)

This article is brought to you thanks to the strategic cooperation of The European Sting with the World Economic Forum.

Distributed ledger technology such as blockchain could boost trade by more than $1 trillion in the next 10 years. That’s the assessment of a World Economic Forum white paper released this week.

Meanwhile, DLT is also set to revolutionize governments processes, and will almost certainly form part of future regulations on cross-border food and drink imports.

The findings come from Trade Tech – A New Age for Trade and Supply Chain Finance which looks at how Fourth Industrial Revolution technologies can beat the “paper monster” of legacy technologies by streamlining trade flows and supply chains.

The global trade financing gap currently stands at around $1.5 trillion – a figure that could rise to $2.4 trillion by 2025, the report’s authors warn.

But by removing barriers and streamlining trading processes, DLT could facilitate up to $1.1 trillion of new trade volume, roughly a 30% increase, significantly plugging the gap.

 A graphic showing global trade flows.

A graphic showing global trade flows.
Image: World Economic Forum/Bain

Small and medium-sized enterprises are set to benefit most of all, along with emerging markets. Current legacy methods, which are expensive and time-consuming, favour large multinationals with established trading and supply chain relationships.

“IBM and Maersk recently ran a test shipment of flowers from Kenya to the port of Rotterdam, the Netherlands, which resulted in a stack of nearly 200 communications documents – a big pile of paper accumulated along the way,” offer the authors in one eyebrow-raising example.

Centuries-old paper process can introduce errors, risks and delays, and make real-time updates and tracking more difficult. In contrast, DLTs, operating as “secure, shared databases”, will reduce waste, delays and transportation costs.

And if the efficiency gains aren’t enough, there’s the fraud argument. In recent years, banks have lost hundreds of millions of dollars through metals trading scams that rely on fake paper warehouse receipts – all of which would have been eliminated by DLT.

Meanwhile, distributed ledgers are being used to promote fair businesses practices in Malawi. A coalition of three banks, Sainsbury’s and Unilever have been rewarding local tea farmers with cheaper finance on the basis of data ranging from water usage to compliance with anti-slavery laws.

That’s not the only way 4IR technology is changing the game of international trade. “Single window” systems – routes for providing standardized documentation through a web portal – have reduced border clearance time in Senegal by 90%, from an average of two weeks to just one day, at the same time slicing costs by 60%.

Advertising

Advertising

Advertising

Advertising

Advertising

Advertising

the sting Milestone

Featured Stings

Can we feed everyone without unleashing disaster? Read on

These campaigners want to give a quarter of the UK back to nature

How to build a more resilient and inclusive global system

Stopping antimicrobial resistance would cost just USD 2 per person a year

FROM THE FIELD: Faces and Voices of Conflict

The Syrian knot cannot be cut without devastating consequences

Road safety: Data show improvements in 2018 but further concrete and swift actions are needed

EU migrant crisis: Germany, France and UK to show the way. Will the rest of the EU follow?

Humanitarian Aid: additional €50 million to tackle drought in the Horn of Africa

Inspiring young doctors: the beginning of the change

This team of Saudi women designed an award-winning app to make the Hajj safer

EU, Brazil to hold high level Summit in Brasilia

Syria: Urgent, concrete actions needed, to protect children too young to ‘make sense of this senseless war’

Fighting cybercrime – what happens to the law when the law cannot be enforced?

Despite violence, ‘tremendous hunger’ for peace in Afghanistan: top UN official

On flight to sustainable development, ‘leave no country behind’, urges aviation agency

The new Kiev rulers ask $35 billion from the West

Climate change is destroying a barrier that protects the US from hurricanes

“Will TTIP solve the massive EU-US unemployment? Absolutely not!” A revealing Sting Exclusive with Tim Bennett from the Transatlantic Business Council

EU to manage external borders against the will of member states; Greece to be the first target

These EU countries have the most government debt

No tears for Cyprus in Brussels and Moscow

What changes in the EU as from today

‘No shortcuts to a healthier world’: WHO chief sets out health priorities for the decade

Companies that put employees first perform better

Why do medical students have to emigrate to become doctors in 2017?

How technology can help us achieve universal healthcare

UN mission welcomes Afghan government’s announcement of Eid holiday ceasefire

Drowning in the Mediterranean this summer? Many happy returns

Millennials aren’t voting – but these young leaders have a plan to change that

Here are 4 ways investors can influence more secure and responsible innovation

These companies can recycle nearly anything, from cigarette butts to fax machines

Dieselgate: Parliament calls for mandatory retrofits of polluting cars

German heavy artillery against Brussels and Paris

A voice from Syria: the positive prospect of clinical research despite the excruciating circumstances

How Costa Rica’s environment minister talks to his daughter about climate change

Commission reports on progress in risk reduction in the Banking Union and calls for faster progress on Capital Markets Union ahead of EU Leaders’ meetings

Commission’s Youth Initiative fails first hurdle by not sufficiently consulting young people

5 surprising ways major cities are going green

Alarming number of women mistreated during childbirth, new UN health agency figures show

How fixing broken food systems can help us meet all the SDGs

‘Bicycle Kingdom’ makes a comeback, as China seeks solutions to tackle air pollution crisis

Draghi’s top new year resolution: Quantitative Easing

A neo-liberal toll free Paradise for the super rich and tax hell for wage earners

Who is to profit from the quasi announced ECB rate cut?

New energy security framework will help meet growing needs in East Africa, sustainably – UN economic wing

How the powerful science of behaviour change can make us healthier

Will the European Court of Justice change data privacy laws to tackle terrorism?

Business should be joyful – just ask the sports world

3 things the G20 can do to save the World Trade Organization

Ukraine-EU deal sees the light but there’s no defeat for Russia

Two-thirds of employees would trust a robot boss more than a real one

Germany and France only care about keeping their borrowing cheap

UN spotlights digitization of audiovisual archives to preserve human history on World Day

What makes Copenhagen the world’s most bike-friendly city?

The impossible end of the war in Syria

Foreign Affairs Council (Trade) of 22/05/2018: EU relations with key trading partners

Cape Town’s crisis shows us the real cost of water

Can a Bavarian Oktoberfest beer indulger bring down the Berlin government?

Sudan: Amidst deaths, injuries, imprisonments, UNICEF stresses children’s protection ‘at all times’

Security Council urged to act with ‘one strong voice’ on raft of ills plaguing Middle East and North Africa

We must help developing countries escape commodity dependence

EU mobilises €21 million to support Palestine refugees via the UN Relief and Works Agency

Zuckerberg preaches that Artificial Intelligence will protect Data Privacy in Facebook whereas Verhofstadt demands the big European state to take charge

More Stings?

Speak your Mind Here

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s